It would be premature to conclude many other retailers will increase profits in the December half by more than 5 per cent as JB Hi-Fi did.

In addition, while the JB Hi-Fi stock price initially leapt 7 per cent when the earnings were released – this was in large part due to the half-year profit coming in better than expectations.

Basically, the analysts that predict performance thought it would be worse.

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A good result for CEO Richard Murray given the challenging market.Credit:Penny Stephens

The second reason for the surge in the share price is that 15 per cent of JB Hi-Fi's register had been short sold – meaning there was a big bet out there on a poor profit outcome and a fall in share price.

The scramble by short sellers to cover their positions initially pushed the shares disproportionately higher.

When JB Hi-Fi’s chief executive, Richard Murray, reaffirmed the full-year sales forecasts and provided a range for expected full-year profit which was ahead of the 2018 financial year, he bestowed the gift of (at least some) certainty. Even at the low end, full-year 2019 earnings won’t be going backwards. This, in turn, pulled the rug from under the short sellers.

You have to wonder whether this was partly his intention. In any event, it doubtless felt good.

In a historical context, the half-year performance was not a great result. It was just a good result given the soft retail environment.

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Australian Bureau of Statistics figures for the all-important month of December show retail sales going backwards by 0.4 per cent and the December quarter sales up by a disappointing 0.1 per cent.

And before the market reads too much into what JB HI-Fi’s result means for the sector, one should remember that this electronics chain is best in class on many measures.

It has demonstrated an ability to continue to evolve its product, contain its costs, keep prices low and execute on service.

Having said that, JB Hi-Fi is clearly feeling the pressure of operating in a market where consumers are reluctant to open their wallets for discretionary purchases.

Murray spoke of volatility in the market as the year progressed – it’s the reason given for the full-year profit forecast to be ahead between 1.6 per cent and 5.1 per cent, the second half of the year may be lower than the second half of the previous year.

The sales numbers produced in January demonstrated clearly enough that things were slowing.

Providing that worst-case profit scenario is presumably designed to ensure that if the market turns to custard between now and June 30, Murray will still have met the forecasts.

It’s a fair bet that Murray and his team would themselves be disappointed with coming in at the low end of their own forecasts.

Murray is, however, reluctant to be too specific about what positive things need to happen to get to the top of the forecast range and how bad the market needs to get for the company to hit the bottom end.

The half-year performance was not a great result. It was just a good result given the soft retail environment.Credit:Max Mason-Hubers

He speaks more in generalities. For example, product mix plays a big part, as sales of high margin product help the bottom line. Another is the general state of competition. If competitors engage in discounting, JB Hi-Fi has to join the party even if it erodes margins.

But he implies that to reach the top end of the range the retail environment would need to improve.

He conceded that consumer sentiment is important but added that the introduction of new and exciting products such as a new generation iPhone or Apple watch can prompt customers to buy, regardless.

Having said that, Murray is pretty upbeat about Australia’s economic prospects, describing it as "being in pretty good shape". He is also hoping that a generous Coalition budget might get consumers to open their wallets a little wider.